In a welcome relief for residents in Tamil Nadu, state Finance Minister Palanivel Thiaga Rajan announced that the newly elected DMK government has decided to cut tax on petrol by Rs 3 per litre. "I am happy to inform the House that this government has decided to reduce the effective rate of tax on petrol by Rs 3 per litre and thereby provide major relief to the toiling working class people in the state. This measure will result in a loss of revenue of Rs 1,160 crore a year," the finance minister said as he presented his maiden budget to the Assembly on Friday.
Apart from the base price of petrol, the Union and state governments both add their respective taxes. The central excise duty on petrol was hiked from Rs 19.98 per litre to Rs 32.9 last year. As of October 4, 2017, the state VAT imposed on petrol in Tamil Nadu was 25 per cent.
The move comes amid India witnessing a steep rise in petrol and diesel this year. Petrol prices were increased on 63 occasions and diesel on 61 so far this year. However, the prices have remained unchanged for the past 25 days.
With the announcement, the Stalin government has partially delivered on its poll promise. Among other assurances, the DMK had promised in the run-up to the April 6 Assembly polls that it would reduce prices of petrol and diesel by Rs 5 and Rs 4 respectively.
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Pointing to such assurances, the main opposition AIADMK has been demanding the DMK to fulfil its poll promises.
On Friday, petrol is being retailed at Rs 102.49 per litre in Chennai, while diesel is being sold at Rs 94.39. Petrol has crossed Rs 100-a-litre mark in Delhi, Rajasthan, Madhya Pradesh, Maharashtra, Andhra Pradesh, Telangana, Karnataka, Jammu and Kashmir, Odisha, Tamil Nadu, Ladakh, and some cities of Bihar and Punjab.
State-run oil refiners such as Indian Oil, Bharat Petroleum and Hindustan Petroleum revise fuel rates on a daily basis, considering the crude oil prices in international markets and the rupee-dollar exchange rates. Any changes in petrol, diesel prices are implemented with effect from 6 am each day. The OMCs align the rates of domestic fuel with that of the global crude oil prices by taking into account any changes in the foreign exchange rates.
